Correlation Between Nasdaq and Heritage Distilling

Can any of the company-specific risk be diversified away by investing in both Nasdaq and Heritage Distilling at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Nasdaq and Heritage Distilling into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nasdaq Inc and Heritage Distilling Holding, you can compare the effects of market volatilities on Nasdaq and Heritage Distilling and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Nasdaq with a short position of Heritage Distilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Heritage Distilling.

Diversification Opportunities for Nasdaq and Heritage Distilling

0.73

Correlation Coefficient

Nasdaq  Heritage Distilling

Poor diversification

The 3 months correlation between Nasdaq and Heritage is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Heritage Distilling Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heritage Distilling and Nasdaq is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Nasdaq Inc are associated (or correlated) with Heritage Distilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heritage Distilling has no effect on the direction of Nasdaq i.e., Nasdaq and Heritage Distilling go up and down completely randomly.

Pair Corralation between Nasdaq and Heritage Distilling

Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.09 times more return on investment than Heritage Distilling. However, Nasdaq Inc is 10.9 times less risky than Heritage Distilling. It trades about -0.17 of its potential returns per unit of risk. Heritage Distilling Holding is currently generating about -0.21 per unit of risk. If you would invest  8,114  in Nasdaq Inc on October 7, 2024 and sell it today you would lose (292.00) from holding Nasdaq Inc or give up 3.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Nasdaq Inc  vs.  Heritage Distilling Holding

Nasdaq Inc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Heritage Distilling

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Heritage Distilling Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Nasdaq and Heritage Distilling

The main advantage of trading using opposite Nasdaq and Heritage Distilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, Heritage Distilling can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Heritage Distilling will offset losses from the drop in Heritage Distilling's long position.

The idea behind Nasdaq Inc and Heritage Distilling Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.